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25 Cards in this Set
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Help us evaluate financial statements |
Ratios |
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Which give us an idea of the firms ability to pay off debts that are maturing within a year |
Liquidity ratios |
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Give us idea of how efficiently the firm is using its assets |
Asset management ratios |
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How the firm finance its assets as well as the firms ability to repay uts long term debt |
Debt management ratios |
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How profitably the firm is operating and utilizing its assets |
Profitability ratios |
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Which bring in the stock price and give us an idea of what investors think about the firm and its future prospects |
Market value ratios |
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An asset that can be converted to cash quickly without having to reduce the assets price very much |
Liquid asset |
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Ratios that show the relationship of a firms cash qnd other current assets to its current liqbilities |
Liquidity ratios. |
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Ratio calculated by dividing current assets by current liabilities |
Current ratio |
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Calculated by deducting inventories from current assets and then dividing the remainder by current liabilities |
Quick( acid test) ratio |
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A set of ratios measure how much effectively a firm is managing its assets... |
Asset management ratios |
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Calcculated by dividing sales by inventories |
Inventory turnover ratios |
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Is a term that originated many years ago with old yankee peddler. |
Turnover |
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Calculated by dividing accounts receivable by average sales per day. |
Days sales outstanding(average collection period) |
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Ratio of sales to net fixed assets |
Fixed assets turnover ratio |
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Calculated by dividing sales by total assets |
Total assets turnover ratio |
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A set of ratios that measure how effectively a firm nanages its debt |
Debt management ratios |
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Ratio of total debt to total assets |
Debt ratio |
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The ratio of earnings before interest abd taxes(ebit) to interest charges |
Times interest earned ratio |
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A group of ratios that show the combined effects of liqudity, asset management, and debt on operating results. |
Profitability ratios |
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This ratio measures operating income, or EBIT, per dollar of sales, it is calculated by dividing operting income by sales. |
Profitability ratios |
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This ratic measures operating income, or ebit, per dollar of sales, it is calculated by dividing operating income by sales |
Operating margin |
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This ratio measures net income per dollar of sales is calculated by dividing net income by sales |
Profit margin |
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The ratio of the net income ro total assets |
Return on total assets |
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This ratio indicates the ability of the firm s assets to generate operating income; calcularedby dividing EBIT by total assets |
Basic earning power(BEP)ratio |
